India. Oilseeds and Products Annual. Apr 2014 Апрель 11, 2014
India’s total oilseed production in marketing year (MY) 2014/15 will be 37.4 million metric tons (MMT), a 2.5 percent decrease from the current year, assuming normal weather patterns during the 2014 June-September monsoon. Tight oilseed supplies in MY 2014/15 will moderate meal production to 18.4 MMT. Growing international demand will increase meal exports to 5.5 MMT. India’s edible oil production may decline to 7.7 MMT, but imports will rise to 12.4 MMT to fill any demand gaps.
India’s total oilseed production, to include soybeans, rapeseed, mustard, peanuts, sunflower seed, cottonseed, and copra is forecast at 37.4 MMT in MY 2014/15 (Oct-Sep), a 2.5 percent decrease from the current year. This forecast assumes normal weather patterns during the 2014 June-September monsoon. The expected dip in production, coupled with growing consumption, and tight stocks will moderate availability of oilseeds for millers. Consequently, total meal and oil production in MY 2014/15 will reach 18.4 MMT and 7.7 MMT respectively, a marginal decrease from the current year.
Assuming strong international demand for Indian oil meals, Post expects meal exports will increase by four percent to 5.5 MMT in MY 2014/15 (NOTE: This forecast does not include castor and rice bran meal). Out-year opportunities for Indian meal exporters will ultimately be determined by domestic demand and international market dynamics.
India’s growing population, rising income levels, and changing consumption patterns are expected to raise edible oil consumption by 10 percent to 19.1 MMT in MY 2013/14. As a result, imports will reach 11.3 MMT. Similarly, MY 2014/15 consumption and imports are forecast at 20.4 MMT and 12.4 MMT, respectively. India’s per capita edible oil consumption is estimated at 15.07 kg and remains significantly short of the current global average of 22.8 kg.
Assuming a normal June-September monsoon in 2014, India’s total oilseed production is forecast at 37.4 MMT in MY 2014/15 (Oct-Sep), a 2.5 percent drop from the current marketing year. Weather conditions during last year’s monsoon were generally favorable, with cumulative levels of rainfall at six percent above the long period average (LPA) of 89 centimeters. Good growing condition prevailed in most oilseed production regions and accounted for stronger than average yields. Nonetheless, eastern, northeastern, and areas of central India experienced weather anomalies that negatively affected production in those areas, which most notably hampered soybean production. Oilseed production estimates for 2013 are based on the Indian Ministry of Agriculture’s (MinAg) most recent data. (NOTE: Minor oilseed crops were not included in MinAg’s report.)
The Government of India (GOI) is reviewing its oilseed production policies and is concerned about rising palm oil imports from Indonesia and Malaysia. The GOI’s 12th five-year plan (FY 2012/13-2016/17) included a National Mission on Oilseeds and Oil Palm (NMOOP), which aims to increase domestic production of edible oils. According to the NMOOP, India will source additional edible oils from three specific sources, to include traditional oilseeds, oil palm, and inedible tree-borne oil crops (TBO) such as pongamia and jatropha. The goal of the NMOOP is to raise production from 7.06 MMT (FY 2007/08 -2011/12 averages) to 9.51 MMT by the end of FY 2016/17.
The Rashtriya Krishi Vikas Yojana (RKVY) program provides states with funding to subsidize agricultural inputs and resources in an effort to increase production. The Union budget for FY 2013/14 allocated Rs 99.5 billion for the development of said program. Provisions include development of pulses and oilseed production in rain fed areas, the development of oil palm, and the establishment of an oilseed-based protein supplement program for livestock dairy, aquaculture, and other animal production sectors in India.
Consumption of oilseed-based food products is expected to grow steadily to 1.9 MMT in MY 2014/15, driven by strong growth in the food processing sector and increasing marketability for higher-value food products made from soybeans, peanuts, rapeseed, mustard, and other oilseeds. Examples of new-to-market products include different kinds of soy-based nuggets, vegetarian snacks, curries, and sauces.
Oilseed exports in the current and forecast years should continue to grow, albeit at a relatively moderate rate due to competition from India’s growing domestic market. Annual Indian exports of peanuts, sesame seed, niger seed, cottonseed, safflower seed, rapeseed, and mustard seed are upwards of $1 billion. Oilseeds can be imported into India without any quantitative restrictions, but typically face high tariffs and complex phytosanitary regulations. Exporters are likely to face tight peanut supplies in MY 2014/15 and volumes will decrease to 600,000 metric tons (MT). Demand for peanuts will remain strong, particularly in China, Indonesia, Malaysia, Philippines, Vietnam, Thailand, Pakistan, Ukraine, Singapore, and Yemen. The GOI’s Agricultural and Processed Food Products Export Development Authority (APEDA) is trying to assist Indian peanut exporters achieve international quality standards. APEDA is working with the peanut industry to issue export guidelines for peanuts and peanut products, register exporters, and issue export certificates through the Indian oilseed and Produce Export Promotion Council (IOPEPC). Currently, IOPEPC and APEDA are coordinating to address quality issues and promote peanut awareness among India’s various domestic stakeholders.
As domestic oilseed consumption is currently outpacing production, stocks held in private and government-owned warehouses are gradually decreasing. From last year through MY 2014/15, India’s total oilseed inventory is expected to contract by over 500,000 MT. The GOI’s Commission for Agriculture Costs and Prices has recommended an increase in the oilseed minimum support price (MSP) for 2013/14 to boost output and provide more liquidity to farmers. The MSP proposal includes minor oilseeds like sesame and niger seeds. As MY 2013/14 market prices were mostly higher than the MSP, Post expects the procurement of major oilseeds by the National Agricultural Cooperative Marketing Federation of India (NAFED) to remain low, except for commercial purchases. Privately held stocks are also expected to be moderate.
Due to tapering production levels, growing demand, and tight supplies, millers have more limited access to oilseeds and strong market prices will further limit oilseed supplies for crushing. Consequently, oil meal production in MY 2014/15 is expected to reach 18.4 MMT, marginally less than in the current year. An estimated 80 percent of India’s total oilseed supply is crushed, with the meal used for animal feed and human food. However, specific end uses can vary according to availability of domestic supplies and international demand.
Assuming normal market conditions in MY 2014/15, oil meal consumption for feed is expected to grow to approximately 12.9 MMT, a two-percent increase over current year consumption. Post forecasts that oil meal feed use in MY 2014/15 will include 4.04 MMT of cottonseed meal, 3.5 MMT of soybean meal, 3.0 MMT of rapeseed meal, 1.7 MMT of peanut meal, and 660,000 MT of other oil meals.
Growing meal consumption in MY 2013/14 is pressuring domestic stocks and could potentially create opportunities for meal exports to India, as the GOI would likely wish to avoid any input cost increases for protein sources such as eggs, dairy, and meat. Over August 2012 to September 2013, the GOI eliminated tariffs for oil meal imports in an effort to augment domestic supplies. While there are no quantitative restrictions on oil meal imports, the availability of other cheap feed materials discourages imports, even at the zero tariff level.
India’s organized feed industry uses soy, peanut, sunflower, and rapeseed meals in various formulations. In addition to animal feed use, oil meals like soymeal are increasingly used in processed food products such as low-cost, high-protein supplements. Soymeal is also finding new niche markets, as soymeal-derived texturized protein and soy protein isolates are used increasingly as substitutes for animal protein and to fortify a wider variety of food products such as wheat flour and biscuits.
Assuming strong international demand for Indian oil meal, Post forecasts meal exports will increase by four percent to 5.5 MMT in MY 2014/15. However, the potential to export will be limited by domestic consumption and competition from international suppliers. During the first five months of MY 2013/14, oil meal exports dropped 16 percent, mainly due to a dip in international demand. Declining sales in recent months to Iran, Vietnam, and Indonesia, affected the total volume of Indian oil meal exports.
Most Indian oil meal exporters will continue to target traditional markets in Asia like Vietnam, Japan, Taiwan, and South Korea. India’s geographical proximity to Asia and the Middle East, its ability to ship in smaller vessels, high protein content (48 percent in soybean meal), and a marketing strategy focused on non-biotech cultivars are key components of the Indian industry’s international marketing strategy. Some Indian organic rapeseed and mustard meal is increasingly finding new markets in Asian and Western countries.
According to a February 2014 GOI interim budget report, the National Livestock Mission (NLM) will receive $44.75 million in FY 2014 to promote the availability of quality feed and forage to dairy and livestock producers. Last fiscal year, the GOI removed a 10-percent export tariff on de-oiled rice bran cake, which led to strong sales to countries like Vietnam where it is an ingredient in cattle feed.
During the previous fiscal year, the GOI allocated INR 132.15 billion for a mid-day meal program for schoolchildren, INR 177 billion for an Integrated Child Development Services program, and other programs to promote protein-rich foods. Several state governments are also promoting increased consumption of low-cost, high-protein supplements derived from soybeans.
Anticipating no significant jumps in oilseed production in the forecast year, and assuming moderate levels of oilseed availability, total edible oil production in MY 2014/15 is estimated at 7.7 MMT, a marginal decrease from the current year’s estimate of 7.9 MMT. Nonetheless this forecast is still eight percent over last year. Lower production estimates for soybean and peanut oil will limit edible oil production in the forecast year. Edible oil production for the current marketing year includes 2.6 MMT of rapeseed oil, 1.7 MMT of soybean oil, 1.5 MMT of peanut oil, 1.3 MMT of cottonseed oil, and 780,000 tons of coconut, palm and sunflower oils. Minor edible oils such as rice bran oil, sesame seed oil, safflower oil, and niger seed oil are not included in this report.
Sesame seed oil is a premium product and is exported in small but significant quantities to niche markets overseas. According to industry sources, sesame seed oil exports in MY 2012/13 were worth $13 million. Countries such as Mexico, the United States, Singapore, Taiwan, China, and the United Kingdom are the most significant markets for Indian sesame oil. MY 2013/14 exports of sesame seed oil should see significant growth due to an uptick in production and solid demand.
India’s growing population, rising income levels, and changing consumption patterns are expected to drive edible oil consumption to 19.1 MMT in MY 2013/14, a 10-percent increase over last year. Most edible oil is used in household food preparation, as well as by restaurants, food processers, and other industrial end users. Palm oil will continue to be the most widely consumed edible oil in India due to its blending versatility with other edible oils and competitive prices. Palm oil’s food use consumption will rise to 9.2 MMT in MY 2014/15. Soybean and rapeseed consumption will rise to 3.2 MMT and 2.6 MMT, respectively. Total edible oil consumption, including peanut, cottonseed and sunflower, will rise to 20.4 MMT in MY 2014/15. India’s per-capita edible oil consumption is increasing (currently estimated at 15.07 kg for MY 2013/14) but remains well below the estimated world average of 22.79 kg per-capita.
Diverse Consumer Preferences and More Health Awareness
Given India’s diversity and demographics, consumer tastes and preferences can vary widely from one region to the next. Coconut, peanut and sunflower oil are widely consumed in south India. Peanut and cottonseed oils are more prevalent in Gujarat and Maharashtra, rapeseed oil in northeast and northwest India. Similarly, soybean oil prevails in central India, and rice bran oil in eastern India.
Given Indian consumers’ range of preferences, India’s edible oil manufacturers are promoting fortified refined palmolein, safflower, and rice bran oils as more healthful options. They also hope to expand production of more palm and traditional oil blends. The use of cottonseed oil is also becoming more popular due to its light color, neutral odor, and blending characteristics with other oils.
Most edible oils in India are purchased by households or by other end users like food processors, restaurants and hotels in loose form or as vanaspati. Vegetable oil is also frequently repackaged and resold under a variety of private labels. The percentage of branded and packaged oils is also growing as refiners are increasingly trying to market to more sophisticated consumers. According to industry sources, upwards of 40 percent of the edible oils in the market are now branded. Branded edible oils sold in low volume, low-priced packages or sachets are selling well, reflecting a growing consumer preference for branded products.
India is the world’s largest edible oil importer, followed by China and the EU-27. Rising domestic consumption in India will continue to drive demand for imported edible oil, which should reach 12.4 MMT in MY 2014/15, a 10-percent increase over the current marketing year. Post forecasts that imports in MY 2014/15 will include 9.4 MMT of palm, 1.5 MMT of soy, 1.5MMT of sunflower, and 20,000 MT of other varieties of edible oils.
On January 20, 2014, the GOI raised the import duty on refined oils from 7.5 to 10 percent (Customs Notification No. 02/2014), while maintaining the tariff on crude edible oil at 2.5 percent (see Customs Notification No 02/2013). Despite Malaysia and Indonesia’s inverted export duty scheme favoring refined palm oil exports, and India’s preferential tariff structure for crude oil, Indian importers will continue to build stocks of refined oils as the difference between crude and refined has narrowed to $10-15 per MT.
During the first five months of the current year, total edible oil imports were down five percent at 4.4 MMT. Based on current trends, total imports are likely to grow 8.2 percent to 11.3 MMT in MY 2013/14.
• As per the GOI’s Department of Commerce’s Notification No. 39 (RE-2012)/2009-2014 dated March 25, 2013, exports of edible oils are banned until further notice. The export restriction does not apply to inedible grade castor oil, coconut oil, and certain other specific tree oils.
• The minimum export price for edible oils in branded consumer packs up to 5kg has been reduced to $1,400 per MT. Previously it was $1,500 per MT (Commerce Notification No. 45(RE-2013)2009-2014 dated October 9, 2013.)
• The GOI extended the subsidized edible oil program for the year ending September 30, 2013. The program is intended to reach target beneficiaries, providing 1.0 MMT of imported edible oils at a subsidy of INR 15 per kg through the public distribution system (PDS).
The only biotech food product currently authorized to be imported into India is soybean oil derived from glyphosate-tolerant soybeans. On June 22, 2007, the Genetic Engineering Approval Committee (GEAC) permanently approved soybean oil derived from glyphosate-tolerant beans for consumption after refining